Finances and Fate: Parent Financial Socialization, Locus of Control, and Mental Health in Emerging Adulthood

Abstract

Utilizing a sample of 4182 U.S. emerging adults and structural equation modeling, we examined how parent financial socialization received during childhood and adolescence is associated with mental health in emerging adulthood and whether locus of control is an intervening variable. Financial socialization was negatively associated with anxiety and depressive symptoms, and positively associated with life satisfaction. Indirect pathways were found through locus of control. That is, emerging adults who had received better financial socialization were more likely to report an internal locus of control and thus were less likely to be experiencing anxiety and depressive symptoms and more likely to be satisfied with life. These findings provide educators with further evidence of the importance of parent financial socialization, being associated with not only financial health but also mental health. Clinicians of emerging adults may consider financial education and internal locus of control development as intervention points for mental health improvement.